This escalated quickly. Lenovo entered an agreement with Google to acquire its Motorola Mobility assets. Google purchased these assets less than three years ago (August 2011), with the intention (at the time), to have a fledged smartphone lineup and access to a bouquet of patents.
The deal was made possible by what Lenovo agreed to cough up – US $2.91 billion in cash and shares. Of that, $1.41 billion was paid up front, comprising of $660 million in cash, and $750 million worth of Lenovo ordinary shares. The remaining $1.50 billion will be paid via a 3-year promissory note. Compare $2.91 billion to the $12.5 billion ($40 per share in cash, at the time), that Google spent to acquire Motorola Mobility.
“The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” said Yang Yuanqing, chairman and CEO of Lenovo. “We are confident that we can bring together the best of both companies to deliver products customers will love and a strong, growing business. Lenovo has a proven track record of successfully embracing and strengthening great brands – as we did with IBM’s Think brand – and smoothly and efficiently integrating companies around-the-world. I am confident we will be successful with this process, and that our companies will not only maintain our current momentum in the market, but also build a strong foundation for the future.”